Hospitality and leisure operators could be missing out on a £16b bonanza by underestimating the spending power of the over 65s age group, according to new research from Barclays Corporate Banking.
The so-called "overlooked generation" is highlighted in the report An ageing population: the untapped potential for hospitality and leisure businesses as having contributed £37b to the UK economy, through spending on the hospitality and leisure sector over the past 12 months. It is estimated that the average over 65 spends £3,372 per annum on leisure and hospitality.
However, only 5% of businesses within the sector see the over 65s as the most important demographic in terms of sales and revenue for their company. While a significant number of hotel and travel businesses are aware that this demographic spend more per customer than any other group, 37% perceive 34-44 year olds - who spend less money on average - as their priority target market.
Surprising, more than three quarters of businesses have no plans to introduce products or services that specifically targets the over 65s, with 37% not even considered targeting this age group and 28% see little financial opportunity in catering to them.
As the UK's population continues to age, the opportunities of missing out on the spending power of mature consumers will increase with the total annual spend of over 65s expected to grow to at least £57b by 2025 according to the Office for National Statistics.
Mike Saul, head of hospitality and leisure at Barclays, described the over 65 age group as "a huge and untapped opportunity" for the sector in the UK.
"There appears to be a gulf between the perception and reality of the spending power of over 65s.
"More needs to be done to start planning and accommodating for the currently 'overlooked generation'. By investment in targeting these customers now, businesses can pre-empt the effects of an ageing population, ensuring they are able to meet and capitalise on the increasing demand."
One of the major benefits of customers in the over 65 age group is their loyalty to businesses with 41% of them likely to mention a company that had provided them with good service, value for money and some kind of incentive scheme. Such loyalty tends to drop to just 19% of 18-34 year olds.